Oil prices slid 1 per cent on Friday and were on track for the biggest weekly falls since October despite hitting three-year highs earlier this week as concerns over growing U.S. production outweighed tightening global supplies.

Brent crude futures were trading 68 cents lower at US$68.63 a barrel at 1:26 p.m. EST. On Monday, they hit their highest since December 2014 at US$70.37.

U.S. West Texas Intermediate (WTI) crude futures were trading at US$63.65 a barrel, down 65 cents. WTI marked a December-2014 peak of US$64.89 a barrel on Tuesday.

Both benchmarks were on track for a weekly loss of nearly 2 per cent.

The International Energy Agency (IEA), in its monthly report, said that global oil stocks have tightened substantially, aided by OPEC cuts, demand growth and Venezuelan production hitting near 30-year lows.

But it warned that rapidly increasing production in the United States could threaten market balancing.

“Explosive growth in the U.S. and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico,” the IEA said of 2018 production.

The energy watchdog forecast U.S. supply growth will push its output past 10 million barrels per day (bpd), overtaking Saudi Arabia and rivaling Russia.

U.S. crude oil production rose nearly 300,000 bpd to 9.75 million bpd last week, according to government data.

“Prices are encouraging drilling and I think there is a race to cash in here at these elevated prices,” said John Kilduff, partner at Again Capital LLC.

However, the U.S. oil rig count, an indicator of future production, fell by five this week but at 747, was still much higher than the 551 rigs a year ago, according to General Electric Co’s Baker Hughes energy services firm.

“Oil prices will need to go higher for rig counts to go higher from here,” said Chris Jarvis, president of Caprock Risk Management in Frederick, Maryland.

Overall, however, oil prices remain well supported, and most analysts do not expect steep declines. The main price driver has been a production cut by major producers led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia since January last year.

The supply cuts, scheduled to last throughout 2018, were aimed at tightening the market to prop up prices.

Even in the United States, not part of the pact to curb output, crude inventories fell 6.9 million barrels last week to 412.65 million barrels, the lowest seasonal level in three years and below the five-year average marker around 420 million barrels.

“U.S. production growth remains a relative counterweight for OPEC/non-OPEC to continue to balance this market,” Again Capital’s Kilduff said.